Thread: The Real Causes of Income Inequality

Originally Posted by adaher

The rich are getting richer in part because they are taking advantage of cheaper labor and capturing more of the gains of economic growth. but this is an unsustainable trend. Third world workers are already asking for more money, which is causing jobs to move yet again, to even poorer places, or back to the West, where employers can at least get value for their money. Of course, they are portraying this as virtue.

The other factor, and a trend which will sustain itself, is technology is replacing human capital in the manufacturing sector. That one won't change, and the owners and few employees of such companies will be doing very well. Which is why Microsoft and Google are making their employees and shareholders rich. They don't need that many people. How many people does Facebook have, 400? All of the big moneymaking industries of the future are not labor intensive, so people who invest in and create in those new industries will be getting very very rich.

Corporate profits doubled after they moved to China ... quite rapidly as they took larger margins from product sales ... it wasn't just a labor swap that drove profits up. I'll agree workers have gotten raises in China the last 6 or 7 years ... I'll guess ... maybe from .75 hr to about 1.50hr. This has caused some of the jobs to be moved to inland China and some to be moved to Vietnam. Very few have moved back west and when the few that do ... you can bet Obama's there to hype that moment. I believe some lock making jobs have returned and a chop stick factory opened in Alabama. A few returned over intellectual property concerns.

As to technology its always there and makes the remaining manufacturing more important. If you look at the government data I provided you will notice the decline in incomes. Also something neglected is the costs we have now as opposed to the past. I can remember people without car insurance. No cable TV. No cell phones. No employers asking you for your e-mail address / internet. Earnings down ... costs up.

Originally Posted by fishjoel

Except the standard of living and incomes of everyone, at all levels, is increasing.

Try talking to people instead of reading the stats that agree with you.
Stats are smoke and mirrors.
Event the physicians in my town are making less money.
EVERYONE is making less money.
AND food prices are rising.

Originally Posted by adaher

The rich are getting richer in part because they are taking advantage of cheaper labor and capturing more of the gains of economic growth. but this is an unsustainable trend. Third world workers are already asking for more money, which is causing jobs to move yet again, to even poorer places, or back to the West, where employers can at least get value for their money. Of course, they are portraying this as virtue.

The other factor, and a trend which will sustain itself, is technology is replacing human capital in the manufacturing sector. That one won't change, and the owners and few employees of such companies will be doing very well. Which is why Microsoft and Google are making their employees and shareholders rich. They don't need that many people. How many people does Facebook have, 400? All of the big moneymaking industries of the future are not labor intensive, so people who invest in and create in those new industries will be getting very very rich.

Is that why Steve Jobs said, shortly before his passing, that manufacturing will NEVER come back to America from China?
I think Steve Jobs knew a little bit more than you.

The only thing that will save our economy is to be what China is...not a member of the WTO.

The problem with manufacturing in America is as much regulatory as labor. In China, they can build these massive factory towns where all of your supply chain is within 50 square miles. There was a time when you could do that here. But today, the regulatory hurdles make that impossible. It's hard even to build a single new factory, much less 200 of them. You can puke up a factory in China in 90 days. Over here, you're looking at a year or two unless you can bribe the right politicians.

Originally Posted by USCitizen

Try talking to people instead of reading the stats that agree with you.
Stats are smoke and mirrors.
Event the physicians in my town are making less money.
EVERYONE is making less money.
AND food prices are rising.

And why is EVERYONE making less money and food prices rising? Could it be, maybe fuel prices are extremely high? And could that be because liberals won't bring home the 500 billion we send to Oil Lords each yr and all the jobs that go with it. It sure seems to me that everyone is digging deeper in their pocket to buy high priced fuel thus making EVERYTHING more expensive.

Originally Posted by michael h

Standard of living is not increasing for everyone as most people are aware. The standard of living has gone down since China came on the scene (PNTR 2000)

As the article cited in the OP and I have said (over and over) is that through automation and (to a much smaller degree than you will admit to) globalization has de-valued unskilled labor.

Also never ever does "everyone" profit or lose over a given time or from a given event. There are always winners and losers

Originally Posted by Forplay

And why is EVERYONE making less money and food prices rising? Could it be, maybe fuel prices are extremely high? And could that be because liberals won't bring home the 500 billion we send to Oil Lords each yr and all the jobs that go with it. It sure seems to me that everyone is digging deeper in their pocket to buy high priced fuel thus making EVERYTHING more expensive.

Why can't we look into alternatives knowing full well that oil companies will not invest in alternative research?
This is a matter of national security, you know, the "general welfare".

Also, for the BILLIONTH TIME, I don't see where manufacturing overseas has done anything other than make unwanted laptops dirt cheap.
Appliances and furniture haven't dropped a penny in price.

Originally Posted by adaher

The problem with manufacturing in America is as much regulatory as labor. In China, they can build these massive factory towns where all of your supply chain is within 50 square miles. There was a time when you could do that here. But today, the regulatory hurdles make that impossible. It's hard even to build a single new factory, much less 200 of them. You can puke up a factory in China in 90 days. Over here, you're looking at a year or two unless you can bribe the right politicians.

I'd have to agree and disagree. We have more regs ... yet our regs are some of the best in the western world for business. I've posted these before. I think it has most to do with almost no regs in China, low labor cost in China and a history of divisiveness between unions and ownership in America. The decision to seek cheap labor goes back to the early 60's and a totally different regulatory environment. It may have taken decades to get to the WTO and low / no tariff agreements ... but it was a long term plan based in profit seeking with the goal of opening America to goods made in China.

Originally Posted by Forplay

And why is EVERYONE making less money and food prices rising? Could it be, maybe fuel prices are extremely high? And could that be because liberals won't bring home the 500 billion we send to Oil Lords each yr and all the jobs that go with it. It sure seems to me that everyone is digging deeper in their pocket to buy high priced fuel thus making EVERYTHING more expensive.

I think it safe to say that increasing world demand from exporting western economy jobs to China and India has contributed greatly to the cost increase. The jobs gained in Asia creates more demand.

Originally Posted by goober

So you never heard of filing jointly, or dependents?

If you educate yourself so that you actually have to facts you will understand how there is a difference. Sorry for giving you the benefit of the doubt of actually being intelligent enough to understand or to have already read about it since you were the one who posted about the 40%, which by the way is the current max but can go to no more than 50% and in France you are also allowed to declare 30% of your home value as a deduction which is a major chunk of money. More so than that US deductions.

Originally Posted by skeptic1

Because we are consumption driven economy it is necessary for purposes of taxation and employment to have a balance in our working class that can provide the necessary taxable income and jobs to meet the required income . If the gap between rich, middle class poor grows too great for Rich combined with middle class to pay the freight we are in trouble. Neither the Rich or the Middle class can carry the load alone.
Production and Consumption falls as well as employment and income and we are where we are today.

So would you then support removal of the EIC and move to a flat tax on everyone? Since the bottom 47% don't actually pay any income tax when the balance sheet is done every year.

Originally Posted by USCitizen

Is that why Steve Jobs said, shortly before his passing, that manufacturing will NEVER come back to America from China?
I think Steve Jobs knew a little bit more than you.

The only thing that will save our economy is to be what China is...not a member of the WTO.

Never took you for an Anti-Union guy but hey we will take what we can get.

Lower Taxes
No Minimum Wage
No Unions

And I thought you were to the left side USCitizen.

Originally Posted by Wlessard

Never took you for an Anti-Union guy but hey we will take what we can get.

Lower Taxes
No Minimum Wage
No Unions

And I thought you were to the left side USCitizen.

If we practiced Fair Trade we wouldn't need unions, especially with today's technology and our ability to communicate and voice our grievances in a civil manner.